Oregon: Economy impacting workers' comp division revenue, administrator says
John L. Shilts, administrator of the Department of Consumer and Business Services' Workers' Compensation Division, said that like most businesses, the division's revenue is being impacted by the economic downturn.
"Because DCBS programs are funded by fees and assessments paid by the industries we regulate, Oregon's declining employment and payroll are affecting the revenue we collect," he said.
According to the department, the two funds that support the workers' comp system are directly related to Oregon's employment base -- the premium assessment (paid based on payroll) and the Workers' Benefit Fund assessment (paid based on cents per hour worked). Due to the economic conditions, Shilts said the projected revenue decline through 2011 is more than $20 million in the premium assessment operating account alone.
"The department has taken responsible steps to manage the projected revenue shortfall, including using funds from our reserves, increasing collections revenue, withdrawing budget proposals, not filling vacant positions, and cutting spending," he said. "Unfortunately, these steps will not be enough to meet the revenue shortfall. In recent weeks, we have notified 27 department employees that they will be laid off over the next few months. Of these, 14 are in the Workers' Compensation Division."
Shilts said the division is also developing projections about the potential revenue impact on the Workers' Benefit Fund.
"We will keep you updated as we continue to monitor the effects of the recession on our programs," he said.
April 23, 2009
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